News
2007-11-30 - Energy brokers launch benchmark CER Index
The London Energy Brokers’ Association (LEBA) is launching a benchmark index on Monday, 3 December. The LEBA Carbon CER Index will be published daily at 18.00 hours London time. The aim is to contribute transparent pricing to the Carbon Emission Reduction market.
David Clark, Chairman of LEBA, and Stewart Lloyd-Jones, CEO of LEBA, said, “This index shows the status and growing importance of the Clean Development Mechanism (CDM) and LEBA believes that the establishment of a recognised pricing mechanism contributes to the integrity and functionality of the market and its future role in the management of climate change.”
Full details of the index can be found in the attached specification.
Enquiries:
Stewart Lloyd-Jones, CEO:
+44 20 7200 7292
To be added to the daily distribution list, please contact Michelle Caulfield at:
mcaulfield@wmba.org.uk
+44 (0)20 7200 7553
Notes to Editors:
1. LEBA, the London Energy Brokers’ Association, is the industry association representing the wholesale market brokers in the over the counter (OTC) and the exchange traded UK and liberalised European energy markets. These brokers intermediate and facilitate bilateral contracts to be concluded between banks, trading houses, commercial enterprises, public utilities and integrated energy businesses, providing liquidity and price discovery to these markets as well as contributing significant liquidity to European exchange traded markets. The major products that they deal in include crude oil and refined petroleum products, gas, electricity and emissions.
2. Note that Certified Emission Reductions (CERs) are generated by emissions reduction projects registered under the Clean Development Mechanism which was set up under the Kyoto Protocol.
3. The LEBA member firms that currently trade the LEBA Carbon CER Index are:-
CantorCO2e
www.cantorco2e.com
Evolution Markets
www.evomarkets.com
GFI Brokers
www.GFIgroup.com
ICAP Energy
www.icapenergy.com
Spectron Group
www.spectrongroup.com
Tradition Financial Services
www.tfsbrokers.com
Tullett Prebon Energy
www.tullettprebon.com
4. LEBA is launching the following index:
LEBA Carbon CER Index:
The LEBA Carbon CER Index is calculated using the volume based weighted average of all trades executed by the seven brokers between the hours of 07:00hrs and 17:00hrs GMT.
5. LEBA currently publishes benchmark indices to support the UK power, TTF and Carbon EUA markets.
6. For further information regarding LEBA and its members, please refer to www.leba.org.uk
LEBA Carbon CER Index Specification
Price Calculation Methodology:
The index price will be calculated every trading day using the volume-weighted average of CER trades transacted by LEBA firms for physical delivery on 1st December 2008, 1st December 2009, 1st December 2010, 1st December 2011, 1st December 2012, along with the Dec08-Dec12 Strip Price.
If other delivery dates, such as immediate delivery, become liquid then these will be also calculated in addition to the dates above.
For the purposes of these indices, trading days are every day except Saturday, Sunday, New Years Day, Good Friday, Easter Monday, Christmas Day and Boxing Day.
Index Publication:
LEBA firms will submit their trades to LEBA, or another agreed method, at the end of every trading day for calculation.
Firms will not include details of the counterparties involved, only the price, volume and time of each trade.
The index price will be published on by LEBA at 6.00pm London time on the London business day of the trading day, and may not be published on LEBA members’ websites. LEBA will not publish on non-Target business days, but will publish the index on the next London business day. LEBA will publish the CER Index on its website in the future.
Number of trades required to set the index:
A minimum volume of 1,000 tonnes must have traded in each product in order to set the index. If less than 1,000 tonnes trades then that day will be treated as if there were no trades.
Contingencies:
Before calculating the Carbon Index, LEBA (or whoever is calculating the index), shall verify if all the contributing firms have made their data available for that day in accordance with the established procedures:-
If one or more of the firms have failed to provide data to LEBA by 17.30 London Time, they (or whoever is calculating the index) shall use their reasonable efforts to contact such firms by telephone and e-mail and remind them of their obligation to provide the data. LEBA will contact these firms again at 17.45 on the same business day.
If by 18.00 London Time on the day same trading day, LEBA has received data from a minimum of three brokers, or 50% of contributing firms (rounded up), then it shall calculate and publish the index, making a note on the publication page of the number of firms who provided data.
Treatment of days with no trades:
If there are no trades on a product then the published index for that day will remain unchanged from the previous day.
For the avoidance of doubt, quoted spread prices between products will not be used to evaluate the index value for products where no trades have taken place.
If a calendar or other spread is traded then the two traded legs of the spread will be treated as two separate trades and both will be used in the calculation of their respective indices.
Trades to be included in the index:
For a trade to be included in the index it must occur on a trading day between 07:00 and 17.00 London time, on the trade date. All trades, including Private and Confidential Trades (P&C), will be included in the index.
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